JOHANNESBURG (Reuters) – South African retailer Steinhoff said an independent report had found it had overstated profits over several years in a $7.4 billion (5.6 billion pounds) accounting fraud involving a small group of top executives and outsiders.

FILE PHOTO: A bird flies past the logo of Price Waterhouse installed on the facade of its office in Mumbai, India, January 11, 2018. REUTERS/Danish Siddiqui

Steinhoff first disclosed the hole in its accounts in December 2017, shocking investors who had backed its reinvention from a small South African outfit to a multinational retailer at the vanguard of the European discount furniture retail industry.

In the country’s biggest corporate scandal, an investigation carried out by PwC found the firm recorded fictitious or irregular transactions totalling 6.5 billion euros (5.6 billion pounds) over a period covering the 2009 and 2017 financial years, according to a summary of the findings posted on the Steinhoff company website.

Investigators found that a small group of former Steinhoff executives and individuals from outside the company, led by an identified “senior management executive,” implemented the deals, which substantially inflated the group’s profit and asset values, the summary said.

Steinhoff did not name the individuals but said those implicated were no longer employed by the company. A company spokeswoman declined to give further details.

The scandal has all but wiped out shareholders’ equity and led to several resignations including chief executive Markus Jooste, who was instrumental in putting Steinhoff on investor radar screens.

Jooste, who has denied any wrongdoing, has not yet made himself available for questioning by PwC investigators. His lawyers did not immediately respond to Reuters email and telephone requests for comment.

The scandal has wiped out 216 billion rand from Steinhoff’s market value since December 2017, a dramatic turnaround of fortunes for a company that was once a must-have in fund mangers’ portfolios.

Steinhoff said investigators found that top management figures entered into fictitious transactions with entities purported to be independent third parties to create the illusion of income used to hide losses at the company’s operating units.

The company did not name the units but said they did not include two European subsidiaries, Pepkor Europe and Poundland, or any of its African units, which include Pepkor Holdings.

“The transactions identified as being irregular are complex, involved many entities over a number of years and were supported by documents including legal documents and other professional opinions that, in many instances, were created after the fact and backdated,” Steinhoff said.

FINANCIAL IMPACT

The full financial impact of the findings was still being determined and would be reflected “to the extent possible” in a restatement of company earnings in the 2016 financial year and as yet unpublished earnings in 2017 and 2018, it said.

The company already wrote down the value of its assets by more than $12 billion after PwC provided a copy of its initial findings in June.

“If we become aware that this impact is materially different, we will update the market,” said Reina de Waal, head of investor relations at Steinhoff.

Steinhoff said it would cooperate fully with any criminal investigations and pursue claims against those responsible for the “unlawful conduct” outlined in the 3,000-page report.

Police in South Africa have said they were waiting for the PwC report before deciding on bringing charges in connection with the fraud.

The disclosure of the scandal in 2017 sparked multiple investigations, including by the elite police unit known as the Hawks.

The state prosecutor in Oldenburg, Germany, has also been investigating the company for suspected accounting irregularities since 2015.

Numerous lawsuits have been filed against Steinhoff, including 59-billion-rand claim by former chairman and top shareholder Christo Wiese and a class action suit from Dutch shareholder rights group VEB.

Reporting by Tiisetso Motsoeneng; Editing by Alexandra Zavis and David Evans